Gina Production Company Uses a Standard Costing System The Factory Overhead Rate Is Based on an Activity Level

Multiple Choice

Gina Production Company uses a standard costing system.The following information pertains to the current year:
$\begin{array}{llr} \text {Actual factory overhead costs \( (\$ 16,500 \) is fixed) } &\$40,125\\ \text { Actual direct labour costs (11,250 hours) } &\$131,625\\ \text { Standard direct labour for 5,500 units: } &\\ \text {Standard hours allowed } &\text { 11,000 hours} \\ \text {Labour rate } &\$12.00\\\end{array}$
The factory overhead rate is based on an activity level of 10,000 units.Standard cost data for 5,000 units is as follows:
$\begin{array}{lr}\text { Variable factory overhead } & \$ 22,500 \\\text { Fixed factory overhead } & \underline{13,500} \\\text { Total factory overhead } & \underline{\$ 36,000} \\\end{array}$ What is the fixed overhead volume variance for Gina Production Company?

A) $1,350 (F)
B) $1,350 (U)
C) $3,600 (F)
D) $4,125 (U)